Metals Exploration Share Discussion Threads

[lord badger] 26/1/2016 11:22

This just out:



The last of the permits have been granted but the company is waiting for the Mines Bureau to verify the rehabilitation works at the RSI following the Typhoon damage…which is likely to be in February! No surprises there then!

The only up side is MTL is the best performing share in my portfolio, and that's saying something, having dropped only a few percent during the recent market rout. And, I guess, the PoG is heading in the right direction.

Does anyone know where gold futures are heading, and also I wonder if/how these delays have affected the gold hedge the company has in place.

[swizz] 11/12/2015 18:10

My thought for Friday,.oak trees don't grow much in December, January and the lighter nights is another matter.....GL S

[lord badger] 11/12/2015 16:27

My thought for Friday: waiting for a return on MTL is like sitting in a field watching an oak tree grow, although at least you get some fresh air doing the latter.

[swizz] 01/12/2015 07:22

We are in business, or indeed will be second half of January!,.......GL S

Partial Suspension Order and Update on Permitting - Runruno Project

Partial Suspension Order Update
Metals Exploration, through its Philippine subsidiary company FCF Minerals Corporation ("FCF"), advises that the rehabilitation and clean up works in the areas affected by the recent typhoon are progressing well. In addition to this work a comprehensive programme of enhancement work is being undertaken on the Malilibeg dump site and within the down-stream Residual Storage Impoundment ("RSI") areas for the satisfaction of the Mines and Geosciences Bureau ("MGB"). These works will be complemented by independent third party geotechnical assessments of the enhanced and existing structures. The programme of works is expected to be completed in December with assessment by the MGB following thereafter.

The completed rehabilitation works and independent geotechnical assessment will provide the MGB the basis to lift the partial suspension order.

Permitting and Commissioning Update
Operational permitting of the Project, in particular the Processing Plant, has continued largely unaffected by the partial suspension order. The majority of the plant is now permitted for operations. The remainder of the plant is undergoing verification and will be permitted progressively as ore is processed and ramp up commences.

The Processing Plant has been successfully commissioned on water and stands ready to commence ore commissioning, which can only occur following the lifting of the partial suspension order impacting the RSI and Malilibeg dump areas, and the subsequent commissioning of the tailing discharge pipeline and the RSI.

Currently the Company is forecasting that ore commissioning of the Processing Plant leading to first production will commence during the second half of January 2016. This forecast is provided after taking into account the combined impacts of the partial suspension order and the comprehensive close down of business in the Philippines over the Christmas and New Year period.

[lord badger] 25/11/2015 09:46

Perhaps. Yesterday did kick off with the £32k trade with the smaller trades following on behind. I expect long term holders are topped up to the brim following the open offer, so these should be newbies jumping in on signs of confidence / big trades / consistent trading. AIMHO.

[swizz] 25/11/2015 07:45

A leaky ship perhaps?......GL S

[lord badger] 24/11/2015 22:30

I'd love to know what sets off these one-day flurries of buying. Eight trades today; from £32k down to £32.

[strollingmolby] 09/11/2015 21:21

Comment on MTL's placing in Baker Steel Resources Trust's NAV announcement last week:

Metals Exploration PLC ("Metals Ex")

As previously announced, following the fundraising via a placement to its three largest shareholders, Metals Ex extended the subscription opportunity to all other shareholders, through an open offer of up to GBP3 million, at 3 pence per share.

On 27 October 2015, Metals Ex announced that the open offer was oversubscribed. The Company applied for its pro rata entitlement and in addition subscribed for further shares, although this over-application was scaled back.

At the issue price the market capitalisation of Metals Ex totals GBP45.7 million, less than half the cost of construction of Metals Ex's Runruno Gold Mine in the Philippines. Given that the mine construction is all but complete and is merely awaiting final operating permits, the open offer was considered a very attractive opportunity to deploy funds in a project that is well understood by the Investment Manager and was only open to existing shareholders. Once in full production Runruno is scheduled to produce approximately 100,000 ounces of gold per annum.

Following damage from Super Typhoon Lando whose track ran close to Runruno, Metals Ex was ordered to suspend certain site works at the end of October 2015 and a programme of repairs and rectification is in the process of being agreed with the Philippines Mines and Geosciences Bureau.

During October 2015 the Metals Ex share price rose 20% to 3.75p per share at month end.

[lord badger] 03/11/2015 01:55

A little look at the new capital structure makes interesting reading and it looks for once like we've come out on top; liquidity appears to have opened up quite considerably. I have the "Other" figure up to to 13.04% from around 6% and when you factor in Baker Steel, which is now not included in the "Not in public hands" category, you get 22.42% in public hands. Given that this figure was around 4.8% not so long ago, that's a fair old change. With some positive news and more shares in play it certainly looks a little better than the strangled market we've been contending with for the last few years.

It also looks as if Messrs Candy and Co didn't take up their entitlement; down to 46.8% from around 49.5%.

I'm feeling a little better now the price is bouncing back up. The only dark clouds on the horizon now are that play has been suspended due to rain (I hope bad light doesn't affect mining operations too!) and the uncertainty surrounding the final permits. I wonder if they'll update the markets with the schedule of remedial works around the RSI? I'm hoping for a nice double whammy crimbo present of completed RSI remedial works and receipt of final permits. I've sent my list to santa!

PoG seems to be holding up OK as well and is still in an up-trend from the summer lows, although it took a bit of a kicking over the past few days after yet another hint from the Fed about a US$ rate rise this year, but they've been hinting about that for over a year now and seem to be managing the economy with hints rather than actual rate movements - "hey, things are looking good and inflation is looming...issue a rate rise hint, that ought to do it". Personally I think we'll see the year out above $1,100 and that's not a huge drop from where we were in June at the AGM when Mr H openly contemplated the delivery of shareholder value in 2016 unless PoG deteriorated markedly.

Lastly, I haven't spotted any more gold miner consolidations although it still appears the big boys are pouring a fair few dollars into upgrading their existing properties to improve recovery rates and average down production costs. Why bother, I hear you say, just buy MTL at $474 per oz. I'd be happy with 16p per share / £257m!

[swizz] 26/10/2015 17:24

Chunky roll over ticks through for circa 1.1M shares......GL S

[swizz] 18/9/2015 18:48

LB, I read it as circa $9.1M in equity via the placing and OO, along with a contingency of up to $5M in debt,.....GL S

[lord badger] 18/9/2015 12:37

Sorry, just read the RNS in detail. Looks like they're after $8m in placing and open offer and an additional $5 in debt securities. Am I reading this correctly?

[lord badger] 18/9/2015 12:16

I think the fact they're only looking for $5m (£3.3M) is a positive sign. In the grand scheme of things £3.3m isn't going to shift the gold posts (see what I did there!) a great deal…as long as the PoG doesn't deteriorate too much. On the latter I think the global economic picture is worse now than when the pundits were prophesying a collapse in PoG. China's not out of the woods by any stretch; Greece will be back in the headlines some time soon; the media will soon be banding around figures for the short-term cost of immigration to the european economies, which won't mean much but will spook some people; the saudi's surely can't hold out too much longer with the taps turned on full, and who knows what impact the timing of an oil price rise will have; and the Fed will probably still be issuing "wait and see" statements about interest rate rises this time next year!

You'd think the imminent increase in the cost of dollar debt, of which the Philippine Government must have plenty, would spur them into getting projects like Runruno into production asap…although probably a drop in the ocean and besides, macro economics rarely filters down to the guy sitting behind his desk issuing permits!

I wonder what the cash burn rate is at the moment; on a monthly basis. That would give us a pretty good idea of how soon they expect to enter production. Perhaps a quick call to the company is in order to try and establish this number. I can't see how it would be considered market sensitive information…although in a way it is. And there's me thinking that 3.87p was a good topping up point in April!

[meijiman] 18/9/2015 11:36

Not disagreeing with that. Yes this was more or less flagged.

[hutch_pod] 18/9/2015 11:25

Agree. Credit for the open offer with excess facility at least.

[davegk] 18/9/2015 11:09

Not brilliant news but not unexpected after the RNS of 7 August. With the company so near to production I for one will be subscribing for my allocation in the open offer and probably taking advantage of the excess application facility!

In my opinion it is to company’s credit that they have provided The Open Offer thereby allowing ordinary shareholders to participate on the same terms as institutions involved in the placing and therefore avoid dilution.

[meijiman] 18/9/2015 09:07

And the reward for loyal shareholders here is to be diluted away so your shares become pretty worthless. The story of this company from an investor perspective is one disaster after another. (many years ago some mate suggested this would be a great investment-thank the Lord only put a bit of cash into it). lots of lessons learned here. Nothing this company said or did ever materialised in terms of the cost or timeframe envisaged. The irony is it might be worth a punt at 3p.

[lord badger] 15/8/2015 00:04

From the look of the capital structure update on the web site, dated 8th August, it appears Investec took up .46% of the 1.9% Baker Steel off loaded and the rest now appears in Other, which is up to 6.33% from 4.37%. Interestingly the web site now states "Not in public hands: 10.69%", which I think is the other way round i.e. not in public hands 89.31%. To much Lambanog I'd suggest! If these figures are the wrong way round, and even less interestingly, they consider Investec's holding to be in public hands with the Other. I'm not sure about this.

[hutch_pod] 07/8/2015 13:55

Thanks for the detailed update LB, appreciate it. Makes for solemn reading but sounds like the AGM was definitely worth attending.

[hutch_pod] 07/8/2015 13:53

And there was me thinking all permits were sorted :(

[lord badger] 07/8/2015 13:52

Hmmm, note this morning's Commissioning and Funding Update! Seems the permit issue mentioned by the Chairman at the AGM has had a significant impact on the move from commissioning to full operation…resulting in a delay and the need for additional working capital.

For those who didn't attend the AGM, the Chairman mentioned that there was an onerous (my word not his) permitting process, which means everything they build / instal needs a permit from the authorities. He mentioned a portable generator needed a permit! He also mentioned that they may get to a position where the commissioning is completed and the plant is ready to commence operations, but unless they had the requisite permits they wouldn't be able to move to production. Seems from this morning's RNS there is at least one element, the RSI pipework, which actually needs a permit before they can complete the work.

Part of the issue, and this is my interpretation of the wording in the RNS, appears to be that the permits are issued on an 'as built' basis i.e. the permit is issued based on what is built not on what the plans and specifications say is going to be built. So they can't get permits in advance of building / installing something. Given it seems every component of the mine needs a permit then is would appear to be a very significant task. On the plus side, I think they're well versed in applying for these permits and understand the right way of going about them; they just can't control the time it takes for the applications to work their way through the approval bureaucracy and for the permit to pop out the other side..

They have clearly blown through the contingency part of the financing package ($8m), which I would guess was sucked up by the Philippine government's change in taxation law which lead to them having to pay for import duty and VAT on plant and machinery imported into the country. I think the Chairman eluded to an unanticipated cost of $10m, which they are appealing through the courts...but which could take years to resolve. This is my own interpretation of where the contingency has gone.

The long and short of it is we have a delay of unknown duration and a requirement for more cash, but no clues as to how much more cash they need. The kicker is, given that they don't know how long the permits will take to come through, they don't know the length of the delay and consequently don't know precisely how much cash they're going to need.

The upside is, if there is one, that although the required working capital will almost certainly run into millions, I personally don't feel it's going to have a huge impact on the final outcome i.e. the value of the mine over the existing 10 year mine life. The downside is we have a delay whilst the price of gold declines and any valuation (important if you subscribe to the the build-it-and sell-it school of thought) becomes that little bit trickier.

Here's the RNS:

[hutch_pod] 31/7/2015 14:32

Added a caveat above, hope that's better! I for sure appreciate it's ballpark.

[lord badger] 31/7/2015 13:50

HP, please be careful with the $550 AISC as this was just us cobbling numbers together from general comments from the Chairman. He did not give a definitive figure and I'd hate people to make investment decisions based on our DIY figure - we did have a few sherbets after the AGM, FYI! He did say it was very hard to get to a number and that the company was looking at it.